Bitcoin Is Time • Hacker News Board

Re: Bitcoin Is Time

#231

Post by ballofrubber » Tue, Mar 02, 2021, 5:25 PM UTC

toto444 wrote: post #195

ballofrubber wrote: post #147

Earlier quoted context omitted.

Would you care to share your Econo101 knowledge? I'm not an economist, but nothing has convinced me yet that bitcoin is not the best form of money.

> I'm not an economist, but nothing has convinced me yet that bitcoin is not the best form of money. Contrary to the Bitcoin crow I don't spend my days thinking about it so my argument may seem weak. You mention bitcoin being 'the best form of money'. Assuming there is a hierarchy of forms of money, from what I understand the main advantage of Bitcoin is that Government can not manipulate its quantity. I wonder if a…

I would say that it shouldn't be the role of a government to govern over money.

The economy is very complicated. There are no models that can predict the output of changing its parameters. It wasn't possible before to have the properties in money that we have with bitcoin (a gold standard was easily removable by a powerful government). The current central banking system is an experiment as much as anything before it and anything that will follow.

I see it like this. I want my economic output to be measured in something that is:

- salabale over time (1 btc is always 1/21 million of the monetary base)

- salabale over space (i want to work remote)

- understandable and auditable (the bitcoin concept can be understood by everyone, the code is auditable by mid-level developers)

Re: Bitcoin Is Time

#232

Post by Applejinx » Tue, Mar 02, 2021, 5:25 PM UTC

dmm wrote: post #26

joosters wrote: post #8

Time is money. Bitcoin is wasted time. And wasted money. And wasted energy.

In the winter I ride my bike down streets lined with cars idling because their owners don't want to ride in the cold for a few minutes. In a way I appreciate bitcoin for its absurd and unambiguous wastefulness. It's sort of the perfect expression of consumerism, destroying the precious and irreplaceable earth for something immediately disposed of.

And then when an exploit finally gets worked out, OR the governments being 'replaced' wage war on bitcoin and its ilk sufficient to obliterate its value (largely based on its acceptance in whatever form and the promise that it WILL replace government currency, in time), all the destruction will have been literally for nothing.

It's fiat currency combined with total energy crisis. It only retains value as long as people are willing to tolerate exponential destruction of resources by the already wealthy who can afford to bankroll any possible conversion of energy directly into 'money', no matter what workaround is required.

If it becomes 'the miners run for one second every day' and there is no way to cheat, these are the people who simply take the same amount of energy they were draining before, and come up with a way to store it the whole day… that or the world blacks out every day, because miners.

Bottom line is unless they get everything they want and dream of, including the eradication of government currency, the escalation will inevitably lead to a collapse where all the work becomes meaningless, valueless. All that energy will have been burned for NOTHING.

We just don't know when that will happen. Bitcoin is time, all right: time running out. Don't be caught still holding it when it pops.

Re: Bitcoin Is Time

#233

Post by boringg » Tue, Mar 02, 2021, 5:26 PM UTC

ballofrubber wrote: post #194

boringg wrote: post #160

Earlier quoted context omitted.

Um transaction costs alone make it not the best use of money. It isn't widely used for goods that you would want to use on a day to day basis / the transaction costs of using it / energy use for bitcoin are some of the low hanging counters to why it isn't the best form of widely used currency. Are those things that can change over time? Certainly - but it hasn't happened yet.

These low hanging counters have been discussed over a lot. Transaction cost is pretty low in multiple views: - You can globally settle billions of dollars worth of bitcoin for less than 10$ [0] - FIAT Settlements between banks is a complicated and non-auditable process, which is internationally speaking also very slow - You can build layers on top of bitcoin, i.e. the Lightning Network or liquid, which reduces transa…

Im answering his question why bitcoin is not the best use of money:

(1) Most people don't settle on large volumes (thats typically banks/states/institutionals) so small volumes have a high cost percentage making it not a good daily driver. The fact that there is any transaction cost makes it challenging to work with as a daily money vehicle for consumers.

(2) It requires energy to exist and keep a ledger, it also requires energy to mine. Your comment on renewable energy isn't accurate sadly and unused energy works only if you can get access to it which isn't universally available. In some jurisdictions renewable energy beats on price but this is largely on huge projects that are bid into utility grids (At least in North America). It will get there but still needs more time.

I don't see how mining subsidizes research in cheap energy.

Understand they have been debated ad nasueum and the reason is that they haven't really passed muster for the use case we are talking about.

Don't equate my arguments as saying bitcoin is bad - it doesn't have a good universal use case for money and it does have negative environmental benefits associated with it.

Re: Bitcoin Is Time

#234

Post by nickysielicki » Tue, Mar 02, 2021, 5:26 PM UTC

cyphertruck wrote: post #185

nickysielicki wrote: post #169

Earlier quoted context omitted.

> Bitcoin is digital gold for settlements among digital currencies. What are the implications of this on the network stability wrt mining? Doesn't bitcoin need transaction volume to remain a stable network? My read is that the incentive structure changes. Right now, miners are motivated by block rewards. In the future, they'll be motivated by transaction fees. If transactions are rare, mining profitably is going to b…

To answer that question you have to make assumptions about the cost of mining, the cost of attacks and the cost of hash power at a point 117 years from now. But we know in the future hash power (technology) will be cheaper and thus bitcoin security will be cheaper, while bitcoin will be more valuable (or non-existing — it has to be either or). Also remember if you have wealth in bitcoin you would likely mine at a los…

> To answer that question you gave to make assumptions about the cost if mining, the cost if attacks and the cost of hash power at a point 117 years from now.

I'm not convinced that you actually do have to make too many assumptions. The claim I'm making here is that bitcoin has had a steady and predictable increase in mining demand as the currency has grown, but that iff bitcoin becomes solely a low-volume high-value settlement platform (instead of a buy-coffee high-volume low-value blockchain), there will be a demand shock once the block rewards go to zero. You can reason about this while keeping the hashrates and cost of achieving that hashrate abstract.

If volume grows, this argument is moot because there will be plenty of transaction fees to gobble.

Re: Bitcoin Is Time

#235

Post by cyphertruck » Tue, Mar 02, 2021, 5:26 PM UTC

vishnugupta wrote: post #217

ballofrubber wrote: post #147

Earlier quoted context omitted.

Would you care to share your Econo101 knowledge? I'm not an economist, but nothing has convinced me yet that bitcoin is not the best form of money.

This[1] is an insightful article from an economist who has experienced the real world economics from very close quarters. I don't have any opinion about Bitcoin one way or another, though through these fascinating arguments I gain new insight about the money and its relationship with geopolitics, human civilisation and other aspects. [1] https://www.yanisvaroufakis.eu/2013/04/22/bitcoin-and-the-da...

That article is from 2013 and so we must grade it on a curve. He makes several wrong assumptions about how bitcoin works because he’s thinking it is based on trust, and he is an inflationist.

I have yet to have an economist explain to me why deflation us bad- computers getting cheaper is good, fixed income people being able to afford things us good. Inflation mainly allows government to hand out money yo wall street in exchange for bribes at the expense of everyone else. That’s not good.

Re: Bitcoin Is Time

#236

Post by boringg » Tue, Mar 02, 2021, 5:27 PM UTC

Mc_Big_G wrote: post #197

boringg wrote: post #160

Earlier quoted context omitted.

Um transaction costs alone make it not the best use of money. It isn't widely used for goods that you would want to use on a day to day basis / the transaction costs of using it / energy use for bitcoin are some of the low hanging counters to why it isn't the best form of widely used currency. Are those things that can change over time? Certainly - but it hasn't happened yet.

Bitcoin has transitioned to "store of value", like gold, not "frequently transacted currency", like the dollar. There's plenty of other crypto currencies that fill that need.

Don't disagree - I am just correcting the OP comment about it being the best use case for money. It isn't the best use for money.

Re: Bitcoin Is Time

#237

Post by kortilla » Tue, Mar 02, 2021, 5:27 PM UTC

andreygrehov wrote: post #202

bena wrote: post #149

Earlier quoted context omitted.

I see this being thrown about as a talking point a lot, but I think it ignores what's fundamentally happening here. Bitcoin is essentially a proxy for another currency. Mostly the USD. These people need a way to protect their assets from what their own governments are doing to the value of their native currencies. They cannot buy securities or foreign currencies for various reasons. Bitcoin gives them a way. A way to…

> Bitcoin is essentially a proxy for another currency. Yes, but this is only temporarily. It's like refactoring systems. You create a new system and a proxy and then have the old system communicate with the new one via the proxy (or vice versa). Eventually, the old system becomes obsolete, so you kill it and get rid of the proxy.

But there is no evidence Bitcoin will ever make that transition. Gold has been around forever and we still don’t transact with it.

Re: Bitcoin Is Time

#238

Post by mmastrac » Tue, Mar 02, 2021, 5:27 PM UTC

gnrlst wrote: post #210

I'm ready to be downvoted to oblivion, especially by all the Bitcoin purists, but I hope my message sparks at least some curiosity. Bitcoin is getting "weaker" every year for several reasons: - emerging centralization due to economies of scale. If this trend continues the mining power will be so consolidated that a 51% attack will be likely. The Nakamoto coefficient is already at 4, and tending towards 3. - energy us…

> The lightning network is incredibly buggy and won't actually solve the problems it's promising

I'm curious to know why this is the case. I don't know much about it - ELI5 or a good link to read more?

Re: Bitcoin Is Time

#239

Post by leppr » Tue, Mar 02, 2021, 5:28 PM UTC

Mikester wrote: post #146

leppr wrote: post #70

Earlier quoted context omitted.

There's nothing about Bitcoin that incentives mining with green energy sources more than dirty one. If coal electricity is cheaper, then bitcoin incentives burning coal. The only somewhat valid rebutals to the energy consumption arguments I know of are: - a lot of it is spare power that would be wasted otherwise (only partially true). - it uses less energy overall than governments spend protecting their fiat money's…

> gold mining uses a lot of energy too (but I doubt Bitcoin will reduce the energy spent on gold mining, it will probably just add up Why do people keep making the comparison to gold mining? It's inappropriate. Gold mining is bad for the value of gold, because it increases the amount of gold in the world. Eventually, the gold coffers on Earth will deplete and there will be no more gold mining. Bitcoin mining is neces…

You're right, amended my comment. Doesn't change the argument though.

Re: Bitcoin Is Time

#240

Post by nickysielicki » Tue, Mar 02, 2021, 5:29 PM UTC

shawnz wrote: post #221

cyphertruck wrote: post #185

Earlier quoted context omitted.

To answer that question you have to make assumptions about the cost of mining, the cost of attacks and the cost of hash power at a point 117 years from now. But we know in the future hash power (technology) will be cheaper and thus bitcoin security will be cheaper, while bitcoin will be more valuable (or non-existing — it has to be either or). Also remember if you have wealth in bitcoin you would likely mine at a los…

> Also remember if you have wealth in bitcoin you would mine at a loss merely to secure your own bitcoin. You could also send null transactions which do nothing but pay a transaction fee

If you're freely giving away money (either in the form of null transactions or putting money into mining) just to secure value that you're holding, you've clearly mispriced the asset you're trying to secure!